What resellers want
Hundreds of new vendors are piling into the UK each year, but what should they do to ensure resellers actually back their technology?
Gartner's latest Cool Vendors research paints a picture of a tech market brimming with innovation, with the analyst recognising no fewer than 456 small and emerging vendors this year that met the brief of being innovative, impactful and intriguing.
Many of them will sputter out because their technology fails to meet its early promise. But it's safe to assume an even greater number will be held back due to a failure to woo the reseller partners that will help them ramp up sales as they expand internationally.
With so many vendors eyeing international expansion right now, CRN spoke to vendors, analysts and distributors to find out the dos and don'ts for building a channel on this side of the pond and what resellers are really looking for from emerging vendors.
Israel- and California-based Anodot was one of five "Cool" analytics vendors cited by Gartner this year and recently bagged $3m (£2.2m) to expand its sales activities in the US and EMEA.
Anodot's vice president of business development, Amir Kupervas, said the main challenge new vendors face is getting the word out in the channel that the product exists. Because of this, he said, the most important thing for new vendors is to listen to what their partners are telling them.
"We currently have partners in the US, the EU and Asia. At this stage in the company life cycle, we want to listen to our partners as it is very important to receive feedback," he explained. "We strongly believe that working with partners is the best way for us to grow. Being able to work with partners who have a local footprint is probably the best thing for start-up companies like us."
Most vendors put a heavy focus on benefits, including deal registration and training incentives to attract partners. But Jonathan Wagstaff, UK country manager at Context, said vendors should focus more on their relationships with partners.
"You need to help partners sell your product," he said. "You need very good pre- and post-sales support. You are not just selling the product, you have to help get it to market."
Q1 of 2016 saw a 9.6 per cent decline in worldwide PC shipments according to Gartner, and Wagstaff said the industry needs to "buck up its ideas" towards partner relationships.
"Q1 has not been great for the channel anywhere in Europe. The UK has actually come off best, from what we can see. One of the general things I've been hearing is resellers are having to cut down the amount of vendors they work with. If they have very small accounts, it is costing them more money to have those accounts than they are making from them," he said.
"Until something breaks, people are unlikely to notice it. When times were good, vendors didn't have to put in as much effort. Often there needs to be an incentive for upping your game. Because it has been a tough Q1, everyone is having to buck up their ideas a little bit. When times are tough, that is when you have to double your efforts."
Mike Pullon, CEO of mobile computing distributor Varlink (pictured), agreed that vendors have to put more effort into partner relationships. He said vendors need to be more creative, as traditional marketing tools are no longer enough to entice resellers.
"I'm not sure that straightforward marketing tools cut it," he said. "There needs to be more creativity. It might be that there is a restricted channel and early partners get significantly deeper discounts for being the first people to take the risk in creating the channel. Maybe there needs to be really strong rebates on a quarterly basis for early sales, to get a higher level of return."
Varlink recently launched Taiwanese vendor Datavan into the UK. Pullon said that his advice for new vendors entering the UK channel would be to provide a certain amount of exclusivity to the first partners who get involved with the brand.
"I definitely think that it is all about selection of partners. I think the manufacturers who bring the product to market need to have some very strong partnerships with resellers at the early stages. There should be a period of time where access is restricted, to at least give those resellers the chance to market themselves to a very prominent position with the end-user community," he explained.
"I don't think that many of the people we have spoken to in the last few years have really understood what it will take to galvanise a reseller base. I think they feel that they can just use our sales officers to tell our customers and then those customers will just start selling the product. You've really got to fight for space these days. They have to be prepared to invest and I'm not sure many of the new guys understand that."
Fellow distributor Ethos Technology works exclusively with new and emerging vendors, currently working with Cohesity, Hedvig and Cumulus Networks. The distie's CTO Adam Worthington said that support from new vendors is what he thinks is the most important thing for resellers.
"What [resellers] are really looking for is someone to work closely with them to understand the offering from a technical and positioning perspective," he said.
Worthington advised vendors that they should add to their support portals so that the resellers can be sure that whatever time of day it is, they can call someone and receive support.
"Fundamentally, [vendors] need a good support portal that has all the information required and all the right support," he said. "This almost always means, in the beginning, working with partners like us to provide on-the-ground support capabilities."
Worthington added that vendors' channel programmes ultimately need more effort and more aggressive pricing for resellers.
"I'm not suggesting vendors need to buy business," he explained. "But if you can show that your knowledge is fantastic; that it really differentiates [partners] from the competition; and that they are going to make twice as much margin as they would selling some of these more traditional technologies, that is a winning combination."